Azure provides businesses with a set of hosted services from Microsoft that allows developers to build rich web based applications that can scale well. Housed in Microsoft's data centers, the service was initially released as a Community Technology Preview and free of charge during its testing phase.

Today Microsoft detailed its pricing structure on how it intends to charge customers for cloud use. Bob Muglia, president of the Server and Tools Business at Microsoft, announced the business and partner model for the company's Windows Azure platform at the Worldwide Partner Conference in New Orleans today. Microsoft will offer Windows Azure, SQL Azure and .NET Services for purchase through a consumption-based pricing model, allowing partners and customers to pay only for the services that they consume. Microsoft partners also will benefit from special promotional offers and discounts.

Microsoft has said it will charge $0.12 per compute hour for its Windows Azure Compute. Amazon's price for an ondemand Windows instance starts at $0.125. The company will also charge $0.15 per GB for storage and $0.10 per 10,000 storage transactions. The full pricing structure will not kick in until Microsoft launches Azure as commercial service at the Professional Developers Conference, due to take place between November 17-19 in Los Angeles. The company plans to launch Azure as a pay-as-you-go consumption model, under subscriptions, and via volume licensing contracts.